 Hi everyone, this is Chico. Welcome to my channel and welcome to another live stream which is actually sort of a little segment that we're doing that we're doing this as a restart in a math tutoring session drop in math during session number 70 that we're doing right now. And I'm just doing this little segment because we're going to need this information for videos that we're about to do regarding investing in personal finance specifically investing in personal finance and comic books in relation to calculating return on investment and annualized return on investment and extrapolating that into the future. Okay and just so you know if you want to follow this work I am on patreon patreon.com forward slash chico if you want to know what this work is about which is basically layered on mathematics almost everything that we've done over the last 15 years is being linked up through the realm of mathematics and this is one place we're taking the next step when it comes to the comic book videos that we've put out right so if you want to follow this work you can follow this work on patreon I don't put anything beyond paywalls everything's creative comments share and share like if you believe that this work deserves your support supporting this work through patreon is a fantastic way to make sure we continue to produce what it is that we are producing and for those of you that was supporting this work on patreon thank you very much for the support and that little zombie that just popped up we are live streaming on twitch twitch.tv forward slash chico live ch-y-c-h-o-l-i-v-e if you want to participate in these live streams in the chat that's going to pop up here twitch is where you want to be at and for those of you who've been participating in these live streams dropping in these live streams subscribing following sharing commenting mods for being here thank you very much for the support hi i'm chat there's dolphin mentioning where the chat shows up okay and aside from that we have a whole bunch of places platforms that we share information mines gap vk alo parlor gap twitter we do have a discord page we do upload audio to soundcloud which should be available as a podcast on spotify and itunes and we are uploading to censored to pitch you to rumble and if we have enough points we do upload to odyssey as well aside from now let's get to this little little teeny we need bit of segment that we're about to do in this drop in math tutoring session number 70 and this video is related to a couple of other videos that we put out in a few years ago one of them was a maximizing revenue question which is related to compound interest right and i'll provide the links in the description of this video and the other one was a return on investment sort of calculation video that we put out in asmr mathematics and they were both asmr math related and personal finance investing and economics related and that video regarding return on investment was basically us taking a look at the movement in relation to us dollars canadian dollar versus canadian dollars versus bitcoin because there was a lot of fluctuation happening during a cryptocurrency period at time and people were sort of freaking out regarding the drops in the movements up and down and stuff like this and we sort of did a little bit of calculation and showed that even in currencies of countries specifically canadian dollars versus us dollars there was a certain five-year period there where us dollars lost 40% of his value relative to canadian dollars and that was sort of in relation to how bitcoin was moving at that time right so return on investment is really relativistic depending on what time frame you're looking at right now let's do this little explanation of where return on investment is and return on investment is basically us trying to figure out how much money we've made regarding a certain type of investment that or bet we might have placed in certain markets right and the formula is really straightforward the formula is present price of something that you might have bought minus the price paid for whatever you might have invested in right price paid divided by price paid now this formula flips depending on you know what people are talking about what they refer to us to and we multiply this by 100 because we want to represent it as a percentage because we want to talk about this thing as percent growth right now what you could write this as price this shouldn't be on their price paid right there's no fraction there right some people say refer to this the price paid as original price future price right present price or remind us original price however way you want to look at it but the best way to understand how this formula works is just use it right so let's assume we have the following example question right or example number one let's assume you bought you bought bought an item an item at let's say 50 dollars okay present price price of item is now 125 dollars what is your rate of return right is 125 dollars present price of item is this much now right what is your rate of return rate of return ROI rate of return right rate of return rate of return our rate of investment well we call rate of return by rate of investment basically investment present price is 125 125 price paid was 50 dollars divided by price paid 50 dollars times 100 and I usually don't include the times 100 we get the decimal and we treat that as a percentage we convert it to a percentage which basically means moving over the decimal place to two places but you can put times 100 and you got to remember that you're in percentages right so this becomes 125 minus 50 75 75 over 50 times 100 right now we need to do this division now before we do this division we can simplify this right what number both goes into 75 and 50 right and we've talked a lot about simplifying fractions in series two of the language of mathematics right well 25 goes into 75 and it goes into 50 how many times is 25 going to 75 it goes three times how many times is 25 going to 50 twice right so this is really three over two times 100 right well three divided by two is 1.5 1.5 times 100 so when you multiply 1.5 five times when you multiply 1.5 times 100 how about that Tony 1.5 times 100 is 150 and remember we're talking percentages that's your percent right that's your rate of return 150 percent right what does that mean it means if you invested 50 dollars in something and sold it at 125 dollars you had 150 percent return on your original investment right you made 100 percent which is your 50 dollars plus 50 percent more 50 percent of 50 dollars is 25 dollars so 50 plus 25 is 75 dollars which is what we had 125 minus 50 75 so you made 150 percent return on your original investment rate of investment right ROI rate of return I guess I call it rate of return but they call rate of interest rate of investment right is that clear that what that's what ROI stands for return on investment so not rate of investment return on investment let's call this correctly right return on investment return on investment now keep this in mind so let's assume you bought an item at 50 dollars a year later your item was worth a hundred and five hundred and twenty five dollars right calisthenics hey chicho this isn't really related to the current stream but I wasn't able to catch one recently a while back in the stream about movies you talked about a history of I bought it on blu-ray but didn't get to watch it look oh dude you're gonna love it you're gonna love it beautiful movie so let's assume we change this question or add a second part to it right I'm gonna erase this part so the answer to the first part you bought an item at 50 dollars present price is this your return on investment question one would have been what's your return on investment question a so I'm going to erase the top as well by the way let's erase this as well I want to copy this up here and we already answered the first question right question is you bought an item at 50 dollars present price present price I'm going to add a little caveat in there present price a year later a year later is now 125 dollars okay let's modify the question a little bit that question a was a was what is your return on investment and we did the calculation we got 150 percent because this is what we did return on investment was present present value minus price paid divided by price paid times 100 which equals 150 percent that's what we got right here's question two part b what will your item be worth assuming you have the same rate of investment or return on investment rate of return return on investment right what would the price of your item be 10 years from now if you assume you're getting the same return on investment per year right what will your item be worth whoops worth if your roi's roi stays the same the same for 10 years okay and this is your compound interest formula compound interest formula says this a is equal to p one plus r over n and t right that's how much money you're gonna have this is how much money you started with or is your interest or return on investment this n is the compounding period that's an n that's an n and t is the time period in years now we're not going to be compounding per year if you want to know what the compounding means reference the video that we're going to link up in the in the description here so we're just going to simplify this equation to r and t if that's the case then this is what we do we start off with 50 dollars right and we're going to assume cumulative 10 years from the time we bought at 50 not from 125 right so our original investment is 50 dollars one plus our rate of return or return on investment is 150 percent now percentages you really don't use in equations as percentages you need to write those as decimals right you got to get rid of the percent and if you get rid of the percent 150 percent is 1.5 right okay let me make the decimal bigger so this becomes one plus 1.5 1.5 to the power of and this is exponents right we've done a lot of work on exponents before 10 because we're going to look 10 years into the future to the power of 10 so this is going to be 50 2.5 to the power of 10 right let's see what our 50 dollars is going to be now it's going to be huge now i'm just going to bring up my calculator on my 2.5 to the power of 10 wow times 50 wow that's a lot of good hard-earned money at 150 return you're going to have four seven six eight three seven thousand dollars right that's crazy that's a lot that seems a little too high for me is that true is that true wow we can do a check right we can do a check just straight up right we started off with 50 we're looking 10 years down the road so all we got to do is multiply this by 1.5 10 times right so manually you can check it you could go 50 times 1.5 oh wait a second 75 75 oh yeah and then we're gonna add it right because your original investment is there so it's times 1.5 plus your original investment which was 50 which kicks it up to 125 right so it's not just multiplying by 1.5 it's multiplied by 1.5 plus add the previous amount so the next one is going to be so plus it becomes a pain in the ass to do it manually by the way right so plus 50 that's 125 times 1.5 you get 187.5 plus 125 because that's what you started off with so now your money here would be 212.5 right now you got to multiply by 1.5 again times 1.5 which is 31875 plus what was it 212 212.5 now you're at 531 25 531 do this 10 times you get this right nice nice if only you could find a place where you can invest your money that has grown to 150 per year that's pretty sweet that's pretty sweet right now that's the other calculation that we're going to be doing when we're looking at personal finance investing and return or yeah return on investment in comic books or collectibles how you do those calculations right now there's another calculation that you can do right what if this return wasn't over a one-year period what if this return was over an extended period and you want to figure out what your annualized rate of return was so you could actually do this calculation and look into the future right let me explain to you what I mean here okay take a look at this thing I'm going to take this guy down watch this I'm going to take this whole thing down now what if instead of using words lots of words I'm just going to draw little arrows and stuff there are loan sharks who charge these kinds of rates yeah indeed they're credit card companies take a look at this thing what if what if you invested 50 dollars right and the matter of and the matter of six years now the reason I'm using six years is because our first comic book haul that we did was in 2015 the video that we put out in February 2015 and we're in February 2021 right now so six years have gone by and I've put the put the spreadsheet together and it was a six-year calculation where we had to figure out what the annualized rate of return was right that's the formula this is the process that we're using in the spreadsheet so just imagine you invested 50 dollars into something and that 50 dollars turned into 125 dollars in six years six years now what we have here now is I should write these a little nicer right in six years so six years later six years you get 125 it's still not bad right you consider yourself getting good returns if you're doubling your money every seven years in six years we've gone up 150 percent but what we want to do because this if this was 2025 this is 2021 what if you want to figure out how much money you're going to have in 2030 how much will you have how much will you have in 2030 right this is sort of projecting right if you're doing your personal finance if you're putting your money somewhere you're getting a certain rate of return right or return on investment what you want to do is you want to do the calculus extrapolate that out into the future so you know how much money you might have banked or how much money you owe someone if you're not banking it you're paying it ouch right but to do this calculation we need that yearly return rate we need to know the rate of return yearly rate of return right annualized rate of return because this is over a six year period so we want to know what the percent the rate percent here is into 2016 right on average over a six year period so this percent the r is going to be the same for 2017 18 19 20 and 21 okay clear this is the way we do it we use the compound formula again wow wow wow right real world math elder god how are you doing check this out our compound formula was this the amount of money you're going to have is going to be your principal p what you started with in our case is $50 times one plus r to the power of t t is your time r is your rate of return right or return on investment p is what you start with is what you have or what you're going to end up with now in mathematics if you have one equation you can solve for one unknown if you have two unknowns you need two equations three unknowns you need three equations four unknowns you need four equations now for us take a look at this thing we want to figure out what the rate of return or return on investment is going to be on a yearly basis based on this growth right that happened over six year period so what we're going to do is we're going to put 50 for p because that's what we started off with we have the data for six year period we know in six years our $50 turned into 150 so this is our hundred sorry 125 the time frame is six and r is what we want to calculate right so if we do this calculation we can figure out what our rate of return is or return on investment is or the interest that we're getting paid back is let's do this it's just straight up algebra and this this is about how to move around an equal sign and we've put a lot of videos out on this stuff right so what you end up doing is divide by 50 divide by 50 that gets rid of your 50 here in your first trouble spot basically to solve for an unknown you undo what's being done to it right and if you do anything on one side of the equation you got to do to the other side of the equation that's the definition of an equation right so we do this on this side now we got one plus r to the power of six this we already did well what does this happen what number goes into 125 and what number goes into 50 well 25 goes into both 25 goes into 50 twice 25 goes into 125 five times right okay make sense so this is just 2.5 five divided by two is 2.5 is equal to one plus r to the power of six we still need to undo what's being done to the r well if you follow bed mass brackets, exponents, addition, multiplication and all your stuff you do that backwards when you're solving your equation so you got to take care of the exponent first you can't take care of the one you want to get r by itself that's the point of solving the equation so what you do you take the sixth root of this right the sixth root of this kills off the power to the sixth right so this becomes one plus r now and this is the sixth root of two oops two point five and then what you can do is grab the one and bring it over so this becomes r i'm just going to write r here because it's easier i like my variables to be on the left side r is equal to the sixth root of 2.5 minus one that's your rate of return that's your return on investment that's the r we're looking for that's that r once we calculate that we can calculate what our return is going to be in 2030 so all you got to do is punch the scent and by the way this the sixth root of 2.5 is 2.5 to the power of one over six minus one that's what it is right because let me write this so you see it better six right we've talked a lot about exponents and radicals in previous videos right so 2.5 to the power of a bracket one oops divided by six close my bracket equals that minus one we get 16 we got 0.16499 so you get let me write this down 0.16499 right now we're not going to go that many decimal places we're just going to go 16.6 point point 165 we're going to round this up right so this is 0.165 which is equal to 16.5 percent annualized annualized return on investment or rate of return okay hello fan james bond right so your return on investment would be 16.5 percent per year which is pretty good very good very very good right so this is annualized annualized return on investment would be this guy right now all we got to do is go back to this formula and punch in 50 year for a principle and stir all that elegans that's nice we put in 50 year we put in 0.165 here what's the time frame from 2015 to 2030 15 15 years here and we'll know how much money our investment will be in 2030 so let's do it let's kill all these guys down here now we're coming back to this be oh he is not that the first part by the way if you're doing this if you're doing this on uh exam at school or anything like this you wouldn't be racing anything you just continue your work right but we're at our space we need to erase so your money that you're going to have at 2030 how much money you're going to have in 2030 let's write this out how much money you're going to have in 2030 is going to be how much you started off with which is 50 dollars one plus what was our r value it was 16.5 but you can't 16.5 percent but you're going to punch that in as 0.165 right 0.165 and we're doing the calculation up to 2030 which is 15 years from 2015 right so to the power of 15 let's figure out how much money we're going to have with a 15 50 dollar investment at a rate of return annualized rate of return of 16 point actually let's do this in red so we know 16.5 percent right there let's do this yes annualized annualized and rate of return or return on investment is 16.5 percent right that's what we're going to punch in that's the number we're going to use so it's going to be oh i was just going to use the calculator so this is really just 50 1.165 to the power of 50 Let's see what comic book we bought that's going to be worth how much. So 1.165, oops that didn't work, 1.165 to the power of 15 is equal to 9.883 times 50 which is 494.15 cents, 494.15 cents, that's how much your investment would be worth in whatever item you bought at 50 dollars if you're getting an annual annualized rate of return or return on investment of 16.5% it's like saying that's how much interest you're being paid per year over a 15 year period if you had your investment for 15 years so you almost made 10 times your money okay cool i must say the interest sucked no the interest is really good 16.5 percent waste is appreciation indeed appreciation now if you had borrowed 50 50 dollars and you were paying 16.5 interest that's how much you owe them in 15 years depending on what you're buying the borrowing the money for right i just wanted to cover that because this is going to be the formulas the process we're using for the comic book videos that we're doing okay that the tables that we've created that we're going to talk about in four days and this is what we're going to be referencing generating tables for for for some if not all of the comic book haul videos that we've made because we're going to generate all the data and take a look at because i've already started creating a table and it's really cool how some of the you know what's going on with the return on investment regarding some of the comic books even for the same runs so i found that interesting so it'd be really cool to share that okay gang there's chat coming up if only savings account had that rate indeed ramy the nosaurus hey so my friend gave me gave me a problem you start with five hundred dollars on on a row you put spending on that okay i'm going to read these things sorry i just hope okay we'll take a look at it but let me erase this let me do my little quick quick quick quick outro of this because this segment we're going to be pulling out of this live stream so gang if you're watching this as a standalone for return on investment and rate of rate of investment return on investment rate of return and stuff like this compound interest which is going to be this is going to be the video that we're referencing with comic book stuff which again there's two main videos that we had that would be in the description of this video i hope you found it useful we're going to be adding more formulas to the spreadsheets and doing more calculations but for now this is pretty cool because at some point we're going to start graphing the data and see what's going to happen over time regarding some of the comic books that we've bought and previous comic book calls and if you want to follow this work if you want to support this work we are on patreon and if you want to be here live during these live streams participating in discussion twitch is where you want to be at we do announce these live streams 30 minutes before we go live on mines the alovk gap parlor now it's back online and twitter we do have a discord page you can find that multiple links all over the place audios we sound upload to soundcloud and this video will be uploaded to censored to pitchu rumble and if you have enough dough we'll upload it to odyssey as well aside from that i'm going to go back to the chat thanks for watching this little short segment